CA tax aggravation - vessel on east coast

[davido]

I had a similar experience. I bought my boat in Florida. I was a legal Oregon resident at the time so was able to avoid Florida sales tax by filing the sales tax exemption (Oregon has no sales tax). The existing Coast Guard documentation listed the homeport as Coral Gables, Florida. However, San Francisco, California was painted on the stern. This is an obvious violation of the requirement to have these homeport statements agree. So when I registered it in my name I changed the Coast Guard documentation homeport to San Francisco to match the painted stern, thinking I would change it at a more conveint time later.

Several months later I got a demand for taxes to be paid to the state of California. I called and spoke to them about the siuation, explained what was going on, and asked what kind of documentation they required to nullify their demand for taxes due.

I wrote a letter explaining how I came to list San Francisco as the home port and that I was not a California resident, that I had no real or personal property within the state of California, had no business or corporate relationships with any business operating in California, that I had no intention of doing business or having any corporate relationships with any business in California, that I personally have not been on California soil or waters in the past XX years , that the boat had not been on California soil or waters since my taking ownership, and that I had no intention of having the boat on California soil or waters in the future. I went on to describe the purchase date and location as well as moorage and travels aboard the boat to date and attached receipts that supported the facts outlined in the letter. I also secured and submitted California Board of Equalization form BOE-1169-B (S1F) Rev 16(7-11). I don’t know if this is still the current form or not.

Several months after submitting the above documents I received a response indicating they were closing the matter.

Remember your audience. These are bureaucrats. Tax bureaucrats. Slip on their shoes. Frequently they are faced with slippery Petes that try sneaky and fraudulent ways to avoid paying taxes. I don’t beleave for a moment that they want to extract taxes from us if those taxes are not due. The easiest path to resolution is to determine what they need to see to satisfy their bureaucratic needs and for us to provide a polite and truthful response to meet their needs. Expressing our personal feeling on irrelevent matters doesn’t aid in meeting the end goal. Definitely would not try to ignore their demand, as this is a more laborious, timely, and potentially expensive approach.

Best of luck and fair winds.

[a64pilot]

The thing that strikes me is do you people really keep receipts from moorings, marinas etc?

[Augi]

If you are a transient and have no previous dealings of any type in California and dock at a marina in California, what is the maximum amount of time you can stay docked at the marina before you owe California property tax?

[danielamartindm]

I've heard so many stories like this over the years- and with real estate and state income taxes as well as vessels. Personally, I think it's sad that we are guilty until proven innocent, but all levels of government share that mindset where their revenues are concerned. If the State of California smalls a rat, they will attach your bank account. So be helpful and open, send them the documentation they demand in a businesslike manner, try to not let it aggravate you, and be grateful it's a one-time thing.

[cyan]

Originally Posted by a64pilot

The thing that strikes me is do you people really keep receipts from moorings, marinas etc?

After reading this thread I do.

[SV Bacchus]

Originally Posted by a64pilot

The thing that strikes me is do you people really keep receipts from moorings, marinas etc?

After we bought we realized we could get buried in paper quick. I got a handy dandy little USB powered scanner, it is a Brother but I don't have the model number in front of me.

When I get paper, I scan it and dispose of it. Everything resides both in my computer and in a nice 2TB USB external hard drive which is where I back up the computer.

If someone were to ask for that stuff I could load them up with a whole bunch of reading!

[Paul L]

Originally Posted by a64pilot

The thing that strikes me is do you people really keep receipts from moorings, marinas etc?

I keep clear in / clear out documentation and sample fuel and mooring receipts. Have a separate zip file sleeve that I stick them in.

[Montanan]

Ranthra:

For starters: What kind of taxation is CA attempting to bill you for?

I suspect it is the personal property taxation and they are desiring to be assured that the boat is no longer in California and thus can waive the personal property tax liability as being not applicable because it is no longer in the State.

Or it could be CA sales/use tax.

Was the California Certificate of Ownership [title] transferred to you?

Did you obtain the California Certificate of Ownership [title] from the seller when you purchased it?
Was the boat's ownership [title] certified in North Carolina when it was relocated to NC from CA? You indicated that you have registered the boat in NC, but registration is not the same as title transfer.

Did you obtain a North Carolina Certificate of Ownership [title]

I would recommend changing the hailing port on the documentation of the USCG to the actual port it is located so as to not have association with the prior port in California which is an ocean away, but I doubt that is the data set that triggered you receiving the bill. I suspect that title was transferred to you within the California DMV which is how the county would receive your name and address associated with ownership of a California titled boat.

Per California website https://www.dmv.ca.gov/portal/dmv/?1...o/boattransfer

Buying or Selling a Vessel (Changing Ownership)
What If I Purchased a Vessel That Is Already Registered in California?
You must:

obtain the California Certificate of Ownership (title) from the seller with the owner's signature release on line "1" of the title.
print your name and address and sign on the back of the title.
submit the title to DMV with the transfer fee and use tax, if due.
if the title is lost, provide a REG 227 with the previous owner's releasing signature.
if the vessel was not purchased from the owner whose name appears on the title, you will need a bill of sale from each in-between buyer.

What If I Lose the Certificates or Stickers?
If you lost the title, complete an Application for Duplicate or Paperless Title (REG 227). If you lost the Certificate of Number or sticker, complete an Application for Replacement Plates, Stickers, Documents (REG 156) to replace the lost certificates or sticker and pay a duplicate fee for each item.

What Must I Do When I Sell My Vessel?
You must:

Notify the department within five days after the sale by submitting a Notice of Release of Liability (REG 138) giving the vessel information, the name and address of the buyer, and the date of sale.
Give the Certificate of Ownership to the buyer with your release (signature) on Line "1" of the title.
DMV vessel forms

Other Information Unique to Vessels
DMV will withhold a vessel transfer, if the county tax collector notifies the department that the personal property taxes are delinquent on a vessel (vessels registered in California are assessed property taxes by the county tax collector where the vessel is stored or where it is moored. Contact the county tax collector for the county in which you reside or where the vessel is moored, if you do not received your tax bill).

[Ranthra]

Montanan - Interesting. I did not receive any Certificate of Ownership / title documents from CA. Does CA require titling of a USCG Documented vessel? NC does not, only registration.


The CA hailing port has already been sanded off, and a new application submitted to the CG with a NC hailing port. That registration form will be a part of the document bundle that I will begrudgingly send.

[Nicholson58]

This exact issue was the subject of a CF thread a few years ago. It seems that California trolls the USCG vessel documentation site for any boats with California in the name or port. They presume Theo owner guilty and put the big squeeze on them. Change your documentation. California is legendary and notorious in pursuing anyone for money. The mistake most people make is to think someone in Sacramento just goofed. Not so. Totally deliberate and relentless.

In Michigan the authorities troll the marinas looking for vessels with out of state home ports or names as possible Michigan owners who are avoiding Michigan sales tax, registration and water use tax.

None of the tax weenies understand that the documented name and home port can be anything and need not even be coastal. Steamboat Springs, Colorado would be acceptable.

[denverd0n]

Originally Posted by davido

Remember your audience. These are bureaucrats. Tax bureaucrats. Slip on their shoes. Frequently they are faced with slippery Petes that try sneaky and fraudulent ways to avoid paying taxes. I don’t beleave for a moment that they want to extract taxes from us if those taxes are not due.

I agree with you -- mostly. Here's where we differ...


I don't think they care if you really owe the taxes or not. They are bureaucrats. Their job is to fill out forms and follow rules. If all the proper forms are filed, and all the correct boxes are checked, then they are happy. If not, they will continue to badger you until they are. Wanting, or not wanting, to extract taxes has nothing to do with it.


What's right and wrong doesn't really matter to them. Whether the taxes are legally due or not doesn't really matter to them. The only thing that really matters to them is getting all the correct forms filled out, and following all the applicable rules. That is how bureaucracies work.

[Montanan]

Originally Posted by Ranthra

Montanan - Interesting. I did not receive any Certificate of Ownership / title documents from CA. Does CA require titling of a USCG Documented vessel? NC does not, only registration.


The CA hailing port has already been sanded off, and a new application submitted to the CG with a NC hailing port. That registration form will be a part of the document bundle that I will begrudgingly send.

Ranthra, so was I correct in assuming the taxation bill from CA was for personal property tax and not Sales/Use taxation?
Ranthra, I had an error in reasoning. USCG documented boats are exempt from California registration and are NOT issued a California Certificate of Ownership . A bill of sale is one of the documents approved by California for proof of ownership / title to obtain registration if registration was required.

Per the California DMV:

An undocumented vessel is registered by the California DMV and issued a Certificate of Ownership.

A documented vessel is registered by the U.S. Coast Guard, and issued a marine certificate.

Per the DMV.org website, [very useful resource for all States].
As to North Carolina it appears that titling with the State is a requirement and also registration is required of USCG Documented boats that are used in North Carolina for more than 90 days.
North Carolina Boat Registration and Licenses

The Wildlife Resources Commission (WRC) is the agency responsible for the titling and registration of boats in North Carolina.

Keep reading to learn about vessel titles and registration AND the qualifications needed to operate watercraft on NC waters.

NC Boats to Title & Register

The NC WRC requires the following types of boats to be titled:

Motorized boats.
Sailboats 14 feet or more in length.
Personal watercraft (e.g. jet skis).

Vessels requiring registration with the WRC include:

Watercraft powered by a motor (including trolling motors and jet skis).
Any boat registered in another state being used in North Carolina for more than 90 days.
Vessels documented with the U.S. Coast Guard used in NC for more than 90 days.
Sailboats measuring more than 14 feet.

Boats that are exempt from the WRC's registration requirements include:

Rowboats, canoes, and rafts powered only by oars or paddles.
Ship lifeboats, if only used for emergency purposes.
Any type of boat used only on a private pond.
Any boat registered in another state OR documented with the U.S. Coast Guard and not kept in North Carolina for more than 90 consecutive days.

Each State has its own rules and regulations, makes for wonderful confusion especially when transiting across the country, i.e., Lewis and Clark style. Then for me I get to add Tribal permitting to the State permitting / registration being within the boundary of the Confederated Salish and Kootenai Reservation, i.e., legally "Indian Country", albeit a one in the same procedure.

[Group9]

Originally Posted by a64pilot

The thing that strikes me is do you people really keep receipts from moorings, marinas etc?

Actually, as disorganized as I am in pretty much everything else, with the boat, we do. We have a giant three ring binder that we put every receipt in that we keep onboard when cruising, at home when not.

One thing we learned on our first cruise, was to take a copy machine with us on every cruise since. Worth every bit of the trouble to store it.

[Scrimshaw4]

I had a similar situation with CA when I moved with my boat from CA to MD. I found out about their tax claim when it showed up on my credit report several years later since they didn't have my MD address. I called the tax office handling the case and they were very helpful in getting the problem solved with a minimum amount of paperwork. They also expedited getting the credit report cleared. I highly recommend calling them and explaining the situation, in a calm and pleasant voice, and asking for their help.

[Ranthra]

Thanks for all of the input and suggestions. I have decided to follow the path of a business-like reply despite my strong feelings of personal infringement. Today I mailed a very large package with a very detailed explanation of the timeline of events, and invoices for unloading and launching following delivery to NC, survey reports, yard work following survey, insurance binder, slip rental invoices for the year, and my USCG application showing hailing port change.



The first response took 5 months after I just submitted the Bill of Sale and NC registration. We'll see how long this takes.